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Mon, 30 Mar 2015 10:52:32 +0000en-UShourly1Universal Credit: progress updatehttp://www.nao.org.uk/press-releases/universal-credit-progress-update/
http://www.nao.org.uk/press-releases/universal-credit-progress-update/#commentsWed, 26 Nov 2014 00:01:17 +0000http://www.nao.org.uk/?post_type=post&p=53387The National Audit Office has concluded that it is too early to determine if the Department for Work & Pensions will achieve value for money in its implementation of the Universal Credit programme.

The Department set out to transform the benefits system with Universal Credit and suffered early setbacks. Since the reset in early 2013, it has reduced the delivery risks by significantly extending its timetable for introducing Universal Credit and choosing a more expensive twin-track approach: the roll-out of its ‘live service’ (which uses pre-2013 IT assets), while at the same time developing its new ‘digital service’.

The DWP believes the additional costs of this approach are justified because it expects Universal Credit to achieve substantial benefits for society sooner and more safely. However, such potential benefits do not mean Universal Credit will be value for money regardless of how it is implemented and the cost of doing so.

Since the reset in early 2013, the Department has developed and refined its ‘test and learn’ approach while continuing to expand its live service. The Department was slow to produce long-term plans for the future services and HM Treasury required the programme to produce more realistic plans before it approved the business case in September 2014.

In the longer term, the DWP has reduced risks in its planned transfer of most tax credit claimants to Universal Credit by extending the timetable by two years to the end of 2019. It was becoming increasingly unlikely that the DWP could transfer over one million tax credit claimants on to Universal Credit in April 2016 as planned without significant operational risks.

The Department’s digital service has been delayed and is still in the very early stages of development. At this early stage it will depend heavily on manual intervention and will handle only a small number of claims – but it is soon to be tested with all claimant types, even the most complex. The timetable is challenging, with the Department planning to start to roll out its fully scalable digital service in just 18 months time. It expects significant savings from its digital service, but does not yet have a contingency plan should the digital service be delayed or fail. It has not evaluated whether it could use the live service instead. The NAO estimates that using live service systems, without further investment, could cost £2.8 billion more in staff costs.

In principle, the DWP’s approach should allow it to learn from experience, improve the design and readiness of services and reduce risks. Given the gradual progress of the past year and the early stage of digital development, the Department has not yet tested its new digital approach, or gone through the process of integrating this with live service.

The NAO finds that the Department has continued to struggle to stabilize senior leadership roles and responsibilities. However, it has taken a more active approach to managing suppliers and establishing financial control within the programme. Among the NAO’s recommendations is that the Department ensure it has a clear basis for making decisions across the strands of the programme.

]]>http://www.nao.org.uk/press-releases/universal-credit-progress-update/feed/0Remploy’s disposal of its Enterprise Businesseshttp://www.nao.org.uk/press-releases/remploys-disposal-enterprise-businesses/
http://www.nao.org.uk/press-releases/remploys-disposal-enterprise-businesses/#commentsWed, 02 Apr 2014 23:01:18 +0000http://www.nao.org.uk/?post_type=post&p=50863Remploy, the provider of employment and services for disabled people, and the Department for Work & Pensions completed the disposal of Remploy factories within a tight timetable and below budget, according to a report today from the National Audit Office.

Remploy Enterprise Businesses employed 2,150 disabled people across 54 factories in 2011-12. That year, the 12 businesses made an operating loss of £49 million and received £53 million in government subsidies. Between August 2012 and December 2013, Remploy disposed of its factories, either selling them as entire businesses or closing them down and selling sites and machinery.

The spending watchdog finds that, in some cases, Remploy was restricted by previous contractual arrangements in designing the sales process, and it could have improved communication and support for bidders. But overall, Remploy appeared to respond proportionately to these constraints. The likelihood of selling more than a minority of the factories was always small, and the Department and Remploy had to balance the need to protect public money and employees’ jobs.

Remploy tried to sell loss-making factories and preserve jobs even though the likelihood of sale was small. By January 2014, it had safeguarded jobs for 442 of its employees.

Today’s report, based on a risk-based investigation, finds that the costs of disposing the factories are likely to be less than expected. The Business Case for the disposal of Remploy businesses estimated the total cost of the programme to be £108.8 million. The DWP estimates that actual costs will be about £100 million, including £63 million in redundancy payments and £8 million in additional support for former employees. Sales have so far raised £12 million and Remploy expects this will reach £19 million.

]]>http://www.nao.org.uk/press-releases/remploys-disposal-enterprise-businesses/feed/0Student loan repaymentshttp://www.nao.org.uk/press-releases/student-loan-repayments/
http://www.nao.org.uk/press-releases/student-loan-repayments/#commentsThu, 28 Nov 2013 00:01:25 +0000http://www.nao.org.uk/?post_type=post&p=49135Until the Department for Business, Innovation and Skills (BIS) has a robust strategy for maximizing the collection performance of student loans and improves its information on borrowers, it will not be well-placed to secure value for money, according to today’s report from the National Audit Office.

BIS forecasts that the total value of outstanding student loans will increase from £46 billion in 2013 to approximately £200 billion by 2042, in 2013 prices. The number of borrowers due to repay is projected to increase from 3 million in 2012-13 to 6.5 million by 2042. The loan book is therefore becoming a substantial public asset.

BIS and its collection partners HM Revenue & Customs and the Student Loans Company (SLC) work together in a joined-up way. In 2012-13, they collected £1.4 billion in student loan repayments, at a cost of £27m. While using the existing tax system brings clear benefits for efficient collection from borrowers who work and pay tax in the UK, BIS nevertheless needs to make better use of data to support its collection strategy and improve its understanding of where it could invest to maximise the collection value of the loan book.

In designing how student loans would work, BIS anticipated that a proportion of the loans would not be repaid. However, BIS has not set an annual target for the amount to be collected because repayments are affected by graduate earnings and economic factors outside its direct control. It does not separately publish its forecasts for the amounts it expects to be collected and has had difficulty developing an accurate forecasting model. Annual repayment forecasts are consistently higher than amounts collected and BIS cannot explain why forecast repayments are currently around 8 per cent higher in value than actual repayments.

Furthermore, it has not done enough to establish whether borrowers with no current employment record are earning enough to repay their loans. While many of these borrowers may not be in employment, BIS and the SLC have carried out little analysis to establish how many may be working overseas or the level of repayments that may be missed. They need to improve their information on borrowers to make more informed judgements about where to invest to maximize recovery.

]]>http://www.nao.org.uk/press-releases/student-loan-repayments/feed/0Universal Credit: early progresshttp://www.nao.org.uk/press-releases/universal-credit-early-progress/
http://www.nao.org.uk/press-releases/universal-credit-early-progress/#commentsWed, 04 Sep 2013 23:01:57 +0000http://www.nao.org.uk/?post_type=post&p=47964The National Audit Office has concluded that the Department for Work and Pensions has not achieved value for money in its early implementation of Universal Credit. The Department is not yet able to assess the value of the systems it spent over £300 million to develop and has been forced to delay the national roll-out of the programme to claimants.

Today’s report concludes that the Department was overly ambitious in both the timetable and scope of the programme. The Department took risks to try to meet the short timescale and used a new project management approach which it had never before used on a programme of this size and complexity. It was unable to explain how it originally decided on its ambitious plans or evaluated their feasibility.

Given the tight timescale, unfamiliar project management approach and lack of a detailed plan, it was critical that the Department should have good progress information and effective controls. In practice the Department did not have any adequate measures of progress.

In early 2013, the Department was forced to stop work on its plans for national roll-out and reassess its options for the future. The programme still has potential to create significant benefits for society, but the Department must scale back its delivery ambition and set out realistic plans.

Over 70 per cent of the £425 million spent to date has been on IT systems. The Department, however, has already written off £34 million of its new IT systems and does not yet know if they will support national roll-out. The existing systems offer limited functionality. For instance, the current IT system lacks a component to identify potentially fraudulent claims so that the Department has to rely on multiple manual checks on claims and payments. Such checks will not be feasible or adequate once the system is running nationally. Problems with the IT system have delayed national roll-out of the programme.

The Department will not introduce Universal Credit for all new claims nationally in October 2013 as planned, and is now reconsidering its plans for full roll-out. Instead, it will extend the pilots to six more sites with these new sites taking on only the simplest claims. Delays to the roll-out will reduce the expected benefits of reform and – if the Department maintains a 2017 completion date – increase risks by requiring the rapid migration of a large volume of claimants.

The spending watchdog found that the Department took some action at the end of 2012 to resolve problems, but was unable to address the underlying issues effectively. The source of many problems has been the absence of a detailed view of how Universal Credit is meant to work. In addition, poor control and decision-making undermined confidence in the programme and contributed to a lack of progress. The Department has particularly lacked IT expertise and senior leadership, with frequent changes in senior management.

]]>http://www.nao.org.uk/press-releases/universal-credit-early-progress/feed/0National Employment Savings Trust Corporation Accounts 2012-13http://www.nao.org.uk/press-releases/national-employment-savings-trust-corporation-accounts-2012-13/
http://www.nao.org.uk/press-releases/national-employment-savings-trust-corporation-accounts-2012-13/#commentsTue, 16 Jul 2013 13:38:12 +0000http://www.nao.org.uk/?post_type=post&p=46997The Comptroller and Auditor General (C&AG) has qualified his audit opinion on the regularity of the National Employment Savings Trust Corporation’s 2012-13 Annual Report and Accounts, on the ground that the Corporation incurred fraudulent expenditure in the year.

A small number of payments to a supplier were fraudulently diverted, resulting in a loss of £1.446 million being incurred by the Corporation. The fraud was of a type known as a mandate fraud and was directed at the Corporation. The Corporation has explained the circumstances of the fraud, including the fact that no money was taken from Pension Scheme members’ retirement pots, in the governance statement in its annual report (section 4.17).

The C&AG considers the fraud led to a material loss of public funds and that the circumstances that gave rise to this fraud were a significant control failure for the Corporation. He has concluded that the expenditure incurred in respect of the fraud has been used for purposes other than that intended by Parliament, and is, therefore, irregular.

The C&AG does also recognize that the Corporation has undertaken the necessary work to investigate the incident and initiated steps to strengthen controls over the payment process.

July 2013

]]>http://www.nao.org.uk/press-releases/national-employment-savings-trust-corporation-accounts-2012-13/feed/0Responding to change in jobcentreshttp://www.nao.org.uk/press-releases/responding-to-change-in-jobcentres-2/
http://www.nao.org.uk/press-releases/responding-to-change-in-jobcentres-2/#commentsTue, 12 Mar 2013 12:36:59 +0000http://www.nao.org.uk/?post_type=post&p=42148The Department for Work and Pensions’ network of jobcentres has coped well in the face of the economic downturn, according to a report today by the National Audit Office. The Department has continued to develop these services in the face of major reforms, but it must improve how it tracks and understands performance.

Despite having limited numbers of staff, jobcentres coped with a rapid rise in claimants after the start of the downturn. In six months (between September 2008 and March 2009), Jobseeker’s Allowance claimant numbers increased by two-thirds (from 0.9 million to 1.5 million). The Department relaxed requirements about the activities that jobcentre staff needed to undertake during 2008-09 and 2009-10, which meant jobcentres were able to prioritize checking eligibility for benefits and making sure claimants were paid.

However, the NAO found that, although the Department has continued to pursue efficiency, variations in case load across jobcentres suggest further gains may be possible. The average Jobseeker’s Allowance caseload per adviser in 2011-12 was 168, but varies by nearly 30 per cent across jobcentre districts.

The Department has simplified its performance measures and now primarily targets the move by claimants away from benefits, or ‘off-flow’, as a simple and intuitive measure of performance. However, this gives no information about how individual jobcentres perform in supporting claimants to work. Some may have found work but, in 40 per cent of cases, the reason for moving off benefits is not recorded. Claimants may have moved onto other benefits, been imprisoned or ceased claiming without taking up work.

A separate survey carried out by the Department estimated that 68 per cent of off-flow from benefit is into work. The Department has yet to decide how to adapt off-flow measures after the introduction of Universal Credit, which merges out-of-work and in-work benefits.

The need to understand performance has been increased by the Department’s move away from nationally mandated processes towards encouraging jobcentre staff to tailor support for claimants. Personal advisers are encouraged to vary the nature of their support, for example by using phone, text messaging and email as well as face to face meetings with claimants. There is also flexibility on the length, timing, staffing and number of work-focused interviews.

While flexibility encourages local innovation, the Department needs to broaden its evaluation of new approaches and improve performance measures if greater flexibility is to lead to better services.

The National Audit Office has today issued a report examining arrangements at the Department for Work and Pensions for detecting and preventing fraud and improper practices in employment programmes.

The report concludes that levels of reported fraud in employment programmes are low. The introduction of the Work Programme in June 2011 largely addressed the main weaknesses in previous programmes which had led to a risk that fraud by providers was being understated. Some risk still remain because not every control applies to every programme, particularly to smaller ones.

The report finds in particular that the Department’s past assessment of the risk of fraud at A4e missed vital evidence. The Department does not currently obtain all relevant copies of providers’ internal audit reports and did not receive the paper sent to the Chair of the Public Accounts Committee. This included evidence of nine possible cases of fraud and seven of improper practice by A4e’s staff and highlighted a possible systematic failure to mitigate the risk of fraudulent and irregular activity at both an office and regional level.

According to today’s report, the total value of cases of reported fraud investigated since 2006 is £773,000. More than half of fraud allegations since 2006 have been in respect of New Deal programmes which ended in 2011. The Department knew of the fraud risks inherent in such programmes but did not do enough to quantify and address them. Compensating controls, for example, checks at employers to verify claims that people had actually been placed in work, were not introduced.

Schemes such as the Flexible New Deal and the Work Programme that replaced the New Deal have been designed with measurable and verifiable outcomes to minimize the risk of fraud. For example, the DWP now checks the records of HM Revenue and Customs to test whether claimants are actually working. But, notably, in the case of the £8 million programme providing mandatory work activity, there are still no independent checks with employers that unemployed people said to have been placed with them for work activity have been.

Among recommendations by the NAO are that the Department make the most of the fraud risk knowledge it possesses and share it more effectively; and that users’ complaints be used to assess the quality of service providers.

]]>http://www.nao.org.uk/press-releases/preventing-fraud-in-contracted-employment-programmes-2/feed/0Train to Gain: Developing the skills of the workforcehttp://www.nao.org.uk/press-releases/train-to-gain-developing-the-skills-of-the-workforce-2/
http://www.nao.org.uk/press-releases/train-to-gain-developing-the-skills-of-the-workforce-2/#commentsTue, 21 Jul 2009 09:30:00 +0000http://www.nao.org.uk/?p=22385Read more]]>At a cost of £1.47 billion by March 2009, Train to Gain had supported employer-focused training for over one million learners, and had developed a skills brokerage service with which a majority of employers was satisfied. But while Train to Gain has achieved undoubted benefits for employers, the NAO has concluded that over its full lifetime the programme has not provided good value for money.

Unrealistically ambitious initial targets and inconsistent implementation reduced the efficiency of the programme. Take up was much lower than expected at first, leading to underspending and the need for changes in eligibility to increase learner numbers. The now strong demand for training needs to be better managed, to make the programme sustainable while avoiding overspending this year.

Learners have nevertheless benefited from improved work skills at a basic level, and surveys of employers have provided evidence of improved business performance from the training. For many of the 554,100 learners who achieved a qualification it was their first qualification, giving them a boost in self-confidence as well as new employment skills. Some employers have reported that the training has led to improved business performance. Many of the 143,400 engagements with employers to provide advice on skills training were with ‘hard to reach’ businesses that had previously provided little or no training for their staff.

Learners’ success rates have varied substantially between training providers. In 2006-07, success rates ranged from 8 to 99 per cent for the largest 100 providers. So while some training providers have been doing a very good job and most are above the ‘minimum standard’ that is being introduced, one quarter of the largest providers were performing below the minimum. A half of employers whose employees received training would have arranged similar training without public subsidy.

The report concludes that the now strong demand for training should be used as an opportunity to focus resources on the areas of greatest need and on training with the highest quality providers. The Learning and Skills Council is taking steps to improve its management and communication of the programme – which has previously led to confusion among employers, training providers and brokers – and the Department and the LSC must be alert to the risk of disruption of these efforts by the transition to the Skills Funding Agency.

]]>http://www.nao.org.uk/press-releases/train-to-gain-developing-the-skills-of-the-workforce-2/feed/0Supporting people with autism through adulthoodhttp://www.nao.org.uk/press-releases/supporting-people-with-autism-through-adulthood-2/
http://www.nao.org.uk/press-releases/supporting-people-with-autism-through-adulthood-2/#commentsFri, 05 Jun 2009 09:30:00 +0000http://www.nao.org.uk/?p=22413Read more]]>The National Audit Office has reported today that Government departments and local health and social care organisations do not have enough information on numbers of adults with autism. They also lack a full understanding and awareness of the condition, limiting their ability to plan and deliver services effectively.

Autism, which includes Asperger syndrome, is a lifelong condition which affects the way in which people interact with the world around them. It is estimated that there are around 400,000 adults with autism in England, many of whom may require specialised support. Yet the NAO found that most NHS organisations and local authorities do not know how many people with autism there are in the areas they serve, and three quarters of local authorities do not have a specific commissioning strategy for adults with autism.

GPs and social care staff have low awareness of autism and how to diagnose it, with 80 per cent of GPs surveyed reporting that they need additional guidance and training in order to identify and treat patients with autism more effectively.

Around 200,000 adults with autism do not have a learning disability. This group often fails to secure appropriate support, as health and social care services are traditionally configured for people with a learning disability, a physical illness or disability, or a mental health problem (which autism is not). Three quarters of local authorities said adults with autism who do not meet eligibility criteria experience or report difficulties accessing the services they require. Almost two thirds felt that current services for adults with autism are limited. Providing specialised support could improve outcomes for this group of people and their carers, and potentially enhance value for money, as the costs of establishing such support could be outweighed over time by overall savings.

There are few specialised employment support services for people with autism. A lack of understanding of autism is a significant barrier to gaining employment and more training is needed for those delivering employment support and those administering benefits.

]]>http://www.nao.org.uk/press-releases/supporting-people-with-autism-through-adulthood-2/feed/0Department for Work and Pensions: Communicating with customershttp://www.nao.org.uk/press-releases/department-for-work-and-pensions-communicating-with-customers-2/
http://www.nao.org.uk/press-releases/department-for-work-and-pensions-communicating-with-customers-2/#commentsThu, 07 May 2009 09:30:00 +0000http://www.nao.org.uk/?p=22435http://www.nao.org.uk/press-releases/department-for-work-and-pensions-communicating-with-customers-2/feed/0